The complications of House v. Price

I’ve got a piece at Vox discussing what happens next with House v. Price, the Obamacare litigation over whether Congress has appropriated the money to make cost-sharing payments.

To bring you quickly up to speed: a district court in Washington, D.C., concluded last year that the Obama administration was breaking the law in making the cost-sharing payments. The court entered an injunction prohibiting the payments; the injunction was then stayed pending appeal. The question for the Trump administration is what to do with that appeal.

I wanted to explain in non-legalese what the case is about and why it has insurers so worried. I also wanted to address the common assumption that the House of Representatives and the Trump administration could cut some kind of deal to keep the cost-sharing payments flowing. Even assuming that’s how both parties want to play it, the lawsuit may be a big headache.

The most straightforward fix would be for Congress to appropriate the damn money. That’s probably a nonstarter, given how many Freedom Caucus members would cry foul at funding Obamacare. Nor is it clear whether the Republican leadership is willing or able to broker a deal with Democrats.

If Congress won’t appropriate the money, the House and the Trump administration could try to bury the hatchet and settle the case. They might say, in effect, “We’ve agreed between ourselves to drop the lawsuit and that we’re better off without the district court’s injunction.” Now that the case is on appeal, however, it’s not so easy as that. The Supreme Court has said that appeals courts can’t overturn district court orders when parties settle their cases, even if both parties ask nicely.

So to get out from under the district court’s injunction, the parties may have to go back to the district court. But the court can modify its prior order only if there’s been a “significant change either in factual conditions or in law.”

Does Trump’s election qualify as such a “significant change … in factual conditions”? Perhaps. Certainly it would be strange to keep an injunction in place when no one on either side of the legal fight wanted it anymore. Judges don’t usually ask too many questions when opposing parties agree about something.

But still, there’s something fishy about asking the court to vacate the injunction — and allowing the payments to proceed. Both the district court and the House of Representatives still believe (correctly, in my view) that it’s unconstitutional for the executive branch to keep making the cost-sharing payments. The Trump administration’s lawyers likely share that assessment. (Until recently, those same lawyers were raging about Obama’s lawlessness.)

The only reason to vacate the injunction, then, is because it’d be awfully convenient to keep making the cost-sharing payments — even though the judiciary, the executive, and the legislature all think those payments are unconstitutional. The judge might well balk. Indeed, she might be offended at the effort to enlist the federal courts in an unconstitutional scheme.

If I’m right about this, the best course of action for Trump administration and the House of Representatives might be to ask the D.C. Circuit to put the case on hold. But that will drive insurers crazy: the president could dismiss the appeal at any point, which would lead to chaos on the exchanges. Will insurers really stick around if the exchanges are that vulnerable?